Chinese Company Continues Plan To Replace Workforce With 500,000 Robots

Possibly the largest electronics manufacturer in the world, Foxconn plans to add a half million robots to its assembly lines.

How to deal with the rising cost of running your factory? Get rid of all those inefficient humans and hire robots instead. Citing labor shortage and rising wages Hon Hai, the world’s largest contract electronics manufacturer, recently announced that it intends to build a robot-making factory and replace 500,000 workers with robots over the next three years.

Supervisors will never have to hear about bathroom breaks again.

Hon Hai, parent company of manufacturing giant Foxconn, which assembles the iPhone and iPad for Apple as well as products for Sony and Nokia. Hon Hai already has 10,000 robots busy at work in its factories, and they’re not wasting any time with their plan to increase the number of robots to one million by 2013. Earlier this month the company announced their plans to build a $3.3 billion “intelligent” technology park in Taichung, Taiwan. That intelligence will come from CNC (computerized numerically controlled) devices, servo drivers and motors, and robots.

Part of the driving force behind the company’s robotization is China’s booming economy. With about 800,000 employees and a yearly revenue of about $60 billion, Foxconn may be largest electronics maker. The company has made its name largely on cheap national labor. But as China’s economic growth has led to increases in worker wages and, at the same time, increased demand for the electronics that Hon Hai makes. Hon Hai’s company chairman Terry Gou, among China’s richest men, spoke at a ceremony where he signed a letter of intent to invest $3.3 billion in greater Taichung. He said the robots will increase the production value of Foxconn by about $4 billion over the next three to five years and create about 2,000 new jobs.

Rumors in the past had pointed to FRIDA as Foxconn's robot of choice, made by the Swiss robotics company ABB. But evidently Foxconn isn't going to wait around for the robots to come to them. And considering the sheer number of robots they plan on building and putting in their factories, it makes more sense for the company to custom-design and build themselves. The program’s initial cost is estimated to be about $223 million, but it should pay off in the long run.

After a spate of jumping suicides, Foxconn began setting up nets like these.

Foxconn is long due for some positive change. A string of suicides at several Foxconn campuses have drawn international scrutiny and criticism. The companies factories are models of efficiency, with a production line scheme designed in such a way that “no worker will rest even one second,” Li Quang, executive director of the labor rights group China Labor Watch, told the New York Times. Between March and May of 2010 nine Foxconn employees leapt to their deaths from Foxconn factory rooftops. Foxconn responded by installing catch nets around their high-risk buildings. Over the past 15 months 14 Foxconn workers have died in what looks to be suicides. Of course, installing half a million robots will most likely lead to much of Foxconn’s workforce looking for other jobs. But the company insists its intention is not to replace humans, but to move humans from jobs that are “dangerous and monotonous” and free them up to do jobs that take more thoughtful research and development. I’ll believe that when I see it.

If his workers might not be, Gou is certainly excited about his company’s coming robot revolution. “The investment marks the beginning of Hon Hai’s bid to build an empire of robots,” read a statement from the Central Taiwan Science Park authorities. At the ceremony, Gou declared that Hon Hai will build an “intelligent robotics kingdom” in the coming years.

“Empire of robots”…”robotics kingdom”…I wonder if Mr. Gou has some bigger plans for his army of robots. Sorry, probably a bad choice of words.

When the robots roll out onto the factor floor, they'll join the warehouse floor-scooting Kiva and other robots that are revolutionizing industry automation. Pretty soon it’s going be strange to see a human on a factory floor. But at least they’ll still need humans to do the more intelligent and creative decision-making jobs. You know, the kind that Watson is studying for right now.

Discussion
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5 Responses

flatcurve·
December 13, 2011 on 10:02 am

Not exactly sure where you’re getting your information from, but it’s highly unlikely that FRIDA will be used for the majority of applications, if it’s even used at all. It’s still a concept robot that isn’t even in production. Meanwhile Yaskawa has had their Motoman SDA20D available for a couple of years now. But even that is beside the point. Ramping up to supply a single customer with a million robots (whether or not they’re even available now) within two years is impossible for any manufacturer, even ABB.

From what I understand, Hon Hai has opened up their own R&D facility in Taiwan to produce their own robots for this effort, simply because they can’t get them from anyone else. This has massive implications though. Currently, roughly 100,000 industrial robots are sold every year. If Hon Hai builds out enough production capacity to supply their own factory with a million robots within three to five years (not two) they will automatically become the world’s largest producer of industrial robots (displacing ABB, Fanuc and KUKA) and the number of robots in their factories alone will be equal to the total robot deployment in the rest of the world.

However, the only way that they’re going to be able to take a shortcut on the R&D and accomplish their ambitious 3-5 year goal is if they blatantly steal technology from other manufacturers. This is a practice that is not unheard of in China. That means it’s unlikely these robots will be sold outside of China, unless Foxconn wants to pay patent license fees for each one of those million robots they build. It still has wide reaching implications though, because China is currently the fastest growing robot market. Having the capacity to supply twice as many robots as the rest of their competitors combined will give them a lock on it. It will also affect the supply chain, as I’m sure that Hon Hai will turn to many of the same suppliers that the other manufacturers do for things like bearings and gear reducers.

Thanks for your very insightful comment. I admit I was taken by the rumors about FRIDA. You’re correct in saying they’re building their own. I modified the article to reflect this more clearly.
Thanks again!

Foxconn doesn’t have a suicide problem. 14 deaths at a single company sounds like a lot – you’d be surprised to learn of 14 suicides at your accounting firm – but Foxconn has a million employees. A suicide rate of 1.4 per 100,000 per year is well under half the national average.

The fact that Foxconn is even considering this pretty much say that robotics is about to overturn employment as we know it. Not to mention the robotics industry in general. The tech and hardware has advanced to a point where all it takes is a company with the chutzpah to thumb it’s nose at the consequential fallout.

Not exactly sure where you’re getting your information from, but it’s highly unlikely that FRIDA will be used for the majority of applications, if it’s even used at all. It’s still a concept robot that isn’t even in production. Meanwhile Yaskawa has had their Motoman SDA20D available for a couple of years now. But even that is beside the point. Ramping up to supply a single customer with a million robots (whether or not they’re even available now) within two years is impossible for any manufacturer, even ABB.

From what I understand, Hon Hai has opened up their own R&D facility in Taiwan to produce their own robots for this effort, simply because they can’t get them from anyone else. This has massive implications though. Currently, roughly 100,000 industrial robots are sold every year. If Hon Hai builds out enough production capacity to supply their own factory with a million robots within three to five years (not two) they will automatically become the world’s largest producer of industrial robots (displacing ABB, Fanuc and KUKA) and the number of robots in their factories alone will be equal to the total robot deployment in the rest of the world.

However, the only way that they’re going to be able to take a shortcut on the R&D and accomplish their ambitious 3-5 year goal is if they blatantly steal technology from other manufacturers. This is a practice that is not unheard of in China. That means it’s unlikely these robots will be sold outside of China, unless Foxconn wants to pay patent license fees for each one of those million robots they build. It still has wide reaching implications though, because China is currently the fastest growing robot market. Having the capacity to supply twice as many robots as the rest of their competitors combined will give them a lock on it. It will also affect the supply chain, as I’m sure that Hon Hai will turn to many of the same suppliers that the other manufacturers do for things like bearings and gear reducers.

Peter Murray

Like robots much?

Thanks for your very insightful comment. I admit I was taken by the rumors about FRIDA. You’re correct in saying they’re building their own. I modified the article to reflect this more clearly.
Thanks again!

talonlode

Foxconn doesn’t have a suicide problem. 14 deaths at a single company sounds like a lot – you’d be surprised to learn of 14 suicides at your accounting firm – but Foxconn has a million employees. A suicide rate of 1.4 per 100,000 per year is well under half the national average.

The fact that Foxconn is even considering this pretty much say that robotics is about to overturn employment as we know it. Not to mention the robotics industry in general. The tech and hardware has advanced to a point where all it takes is a company with the chutzpah to thumb it’s nose at the consequential fallout.

max.nordlund

ABB isn’t Swiss, it’s Swedish. As a Swede myself I just couldn’t help to notice.